India Surpasses Japan to Become World's Fourth-Largest Economy

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Date: May 26, 2025
By:  Business Desk

India has officially overtaken Japan to become the world's fourth-largest economy, marking a significant milestone in its economic trajectory. According to the International Monetary Fund's (IMF) World Economic Outlook report released in April 2025, India's nominal Gross Domestic Product (GDP) is projected to reach $4.19 trillion, slightly surpassing Japan's estimated $4.18 trillion .DD News+3The Indian Express+3mint+3

Key Highlights

• Economic Growth: India's economy has demonstrated robust growth, with the IMF projecting a 6.2% expansion in 2025, supported by strong private consumption, particularly in rural areas .mint+1The Indian Express+1

• Per Capita Income: India's per capita income has doubled from $1,438 in 2013-14 to $2,880 in 2025, reflecting improved living standards .The Indian Express

• Future Projections: NITI Aayog CEO B.V.R. Subrahmanyam expressed optimism about India's economic future, stating that if current growth trends continue, India could surpass Germany to become the third-largest economy within the next 2.5 to 3 years .DD News+8mint+8@EconomicTimes+8

Factors Contributing to Growth

Several factors have contributed to India's economic ascent:

• Favorable Geopolitical Environment: India has benefited from a favorable geopolitical and economic environment, attracting global investments and fostering economic stability .@EconomicTimes+1www.ndtv.com+1

• Demographic Dividend: With a population of over 1.4 billion, India possesses a vast and relatively young workforce, fueling economic growth .Mellon

• Policy Reforms: Government initiatives aimed at improving infrastructure, manufacturing, and digitalization have created a conducive environment for economic development.

Industry Perspectives

Business leaders have acknowledged this achievement while emphasizing the need for continued reforms. Anand Mahindra, Chairman of the Mahindra Group, highlighted the importance of focusing on per capita GDP and sustained economic reforms in governance, infrastructure, manufacturing, education, and capital access to ensure inclusive growth .mint

Global Economic Rankings (2025)

1. United States: $30.51 trillion

2. China: $19.23 trillion

3. Germany: $4.74 trillion

4. India: $4.19 trillion

5. Japan: $4.18 trillion

6. United Kingdom: $3.84 trillion

7. France: $3.21 trillion

8. Italy: $2.42 trillion

9. Canada: $2.23 trillion

10. Brazil: $2.08 trillion .The Indian Express+7mint+7mint+7

India's rise to the fourth position underscores its growing influence in the global economic landscape. As the nation continues to implement structural reforms and leverage its demographic advantages, it is poised for further economic advancement.